SAN FRANCISCO (AP) - Transgender people receiving Medicare may no longer be automatically denied coverage for sex reassignment surgeries, a U.S. Department of Health and Services review board ruled Friday in a groundbreaking decision that recognizes the procedures as a medically necessary and effective treatment for individuals who do not identify with their biological sex.

Ruling in favor of a 74-year-old Army veteran whose request to have Medicare pay for her genital reconstruction was denied two years ago, the agency's Departmental Appeals Board ruled that a three-decade-old HHS rule excluding such surgeries from the procedures covered by the national health program for the elderly and disabled was unjustified.

"Sometimes I am asked aren't I too old to have surgery. My answer is how old is too old?" the veteran, Denee Mallon, of Albuquerque, New Mexico, said in an email interview before the board issued its decision. "When people ask if I am too old, it feels like they are implying that it's a 'waste of money' to operate at my age. But I could have an active life ahead of me for another 20 years. And I want to spend those years in congruence and not distress."

Jennifer Levi, a lawyer who directs the Transgender Rights Project of Gay & Lesbian Advocates and Defenders in Boston, said the ruling does not mean Medicare recipients are necessarily entitled to have sex reassignment surgery paid for by the government.

Instead, the lifting of the coverage ban means they now will be able to seek authorization by submitting documentation from a doctor and mental health professionals stating that surgery is medically indicated in their individual case, Levi said.

Transgender health advocates said that because private insurance companies and state-run Medicaid programs that provide health insurance for low-income individuals often take their cue from the federal government on which treatments to approve or exclude, the decision could eventually pave the way for sex-reassignment surgeries to be a routinely covered benefit.

No statistics exist on how many people might be affected by the decision. Gary Gates, a demographer with The Williams Institute, a think tank on LGBT issues based at the University of California, Los Angeles, has estimated that people who self-identify as transgender make up 0.3 percent of the U.S. adult population. Over 49 million Americans are enrolled in Medicare.

The appeals board's decisions are binding on HHS unless they are appealed in federal court. The Centers for Medicare and Medicaid Services, the agency within HHS that manages Medicare, opted not to defend the transgender surgery exclusion before the five-member board and had initiated the process for lifting it on its own before Mallon filed her complaint.

The ruling does not apply to Medicaid, which provides health coverage for individuals and families with low-incomes and is regulated by the states. Some states have blanket exclusions on sex reassignment surgeries and the sex hormones transgender people often take during their transitions, while others evaluate claims on a case-by-case basis.

Transgender rights activists hope the action on Medicare motivates private insurers, who often take their cues on what is considered medically necessary, elective or experimental from the federal government to eliminate exclusions on sex reassignment surgeries from their plans.

Mallon was born a man and identifies as a woman.

"When I learned that Medicare denies the essential care I need, I remember saying 'This is not right. They're relying on these archaic reasons to deny me the care my doctor agrees I need? I knew I had to do something to challenge that," Mallon said.